Just had lunch with a RIO manager, interesting proposed expansion plans for Cape Lambert. he said he heard that CFE will build a slurry line to port. If we don't get taken over, all the better, CFE is all over delivering IO overseas, either way it will be gold.
Mining News Article
Russian steelmakers back in Australian iron ore race
Kate Haycock Friday, 18 July 2008
RUSSIAN interest in Cape Lambert could undermine the iron ore junior’s deal to sell its namesake project to Chinese investors – if the new investor in the play decide to make a takeover bid.
Russian steelmaking group Evraz has been revealed as the mystery buyer of a 16% stake in the company’s shares, marking another new international entrant into the race for Australian iron ore.
Evraz is part-owned by Russian billionaire Roman Abramovich whose wealth is at estimated at more than $US24 billion.
While rumours are swirling around talk that the Russians will dive in with a counter-bid to the Chinese, as yet no such offer has materialised.
Cape Lambert is in the final stages of selling its namesake project to Chinese conglomerate, China Metallurgical Group Corporation.
The agreement will see MCC acquire the magnetite project in Western Australia’s Pilbara region for $A400 million.
However, according to news reports in the Australian Financial Review, at a meeting in Singapore with Cape Lambert’s directors the Russians have criticised the Perth-based play for selling the project too cheaply.
While shareholder approval is required for the MCC sale to go ahead, at this stage Evraz’s 16% is not enough to scupper the sale.
The interest in Cape Lambert comes after a frenzy of steelmaker buying into Australian iron ore and coal plays over the past year.
Queensland coal miner Macarthur Coal has been a major target, now boasting Anglo-Indian major ArcelorMittal, Korea’s POSCO and China’s CITIC on its share register.
Then there has been China’s state-owned Sinosteel and its arduous battle for control of Midwest Corp, officially only won this week.
Sinosteel has also purchased shares in the other company trying to take over Midwest, fellow iron ore hopeful Murchison Metals.
Earlier this year year, Chinese company Shougang made a failed play for Mount Gibson iron ore – after its attempt to buy a stake from Russian steelmaker Gazmetall was blocked by the Takeovers Panel.
Shougang also has a joint venture with Australasian Resources over the Balmoral South project, which lies alongside CITIC’s development at the Sino iron ore project in the Pilbara.
Russian interests also have a stake in Australia’s newest iron ore success story, Fortescue Metals Group.
Massive Russian company Magnitogorsk Iron & Steel Works picked up almost 6% of FMG last year, sparking a round of takeover rumours in that direction as well.
There has also been Russian interest in Australian nickel. Norilsk Nickel’s $7.6 billion takeover of LionOre last year pipped acquisitive Swiss major Xstrata to the post, while another eastern European group, Ukrainian steel group Palmary Enterprises, picked up manganese miner Consolidated Minerals earlier this year.
Of course, international interest in Australia’s iron ore and coal plays is nothing new – Japanese steelmakers have a number of long-running joint ventures and alliances with majors BHP Billiton and Rio Tinto in both commodities.
CK
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